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Alberta passes bill to restrict the flow of oil and gas to B.C., escalating trade war

EDMONTON — Alberta’s New Democratic Party government passed a bill Wednesday that it says will give the province new powers to restrict the flow of energy resources to British Columbia.

Bill 12 — the Preserving Canada’s Economic Prosperity Act — authorizes the government to issue licences for any company exporting energy products from Alberta. The province can use this as a tool to identify companies shipping products to British Columbia, including natural gas, crude oil and refined fuels such as gasoline, diesel and jet fuel.

Premier Rachel Notley says Alberta will pass a bill that grants it the power to intervene in the energy market, as Ottawa renews its commitment to Trans Mountain. The federal government said Wednesday it will backstop the pipeline expansion. (The Canadian Press)

The energy ministry is being asked to issue these licences in the public interest to see whether there is a significant return for the province. Companies that do not comply with the terms of their licence could face fines of up to $10 million per day. Individuals could face fines of up to $1 million per day.

If necessary, this would allow the province to “turn off the taps,” said Alberta Premier Rachel Notley on Wednesday.

“Albertans have the right to choose how our energy is shipped, so that Alberta gets the best return possible,” she said. “Bill 12 gives us that power.”

With that authority, the province could place restrictions on pipelines as well as transport via rail or truck.

Alberta Premier Rachel Notley updates reporters on the progress of the Kinder Morgan pipeline in Edmonton on Wednesday. (Jason Franson / The Canadian Press)

“Make no mistake,” Notley said during the bill’s third reading in the legislature. “We will not hesitate to use that power.”

The move comes in the midst of an ongoing fight between Alberta and British Columbia over the fate of the $7.4-billion Kinder Morgan Trans Mountain pipeline extension project.

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On Wednesday, federal Finance Minister Bill Morneau, said the federal government will financially backstop Trans Mountain, and says if Kinder Morgan walks away, other potential partners may step up.

Notley, who has also said her province would invest in the project to make sure it gets completed, lauded Morneau’s announcement.

“We’re engaged in the conversations that are going on between Kinder Morgan and the federal government, and when there’s more detail that is in everyone’s best interest to disclose, then we’ll do that then.”

Notley refused to outline a timeline for when the legislation kicks in, saying it could take anywhere between 24 hours to a few weeks.

B.C. Premier John Horgan has said his government is exploring legal options to stall the project over concerns he says it poses to the province’s coastline. Alberta, for its part, says the pipeline is critical infrastructure to get its oil to tidewater.

Kinder Morgan received federal approval in 2016 to build the line to get more Alberta oil to tankers on the B.C. coast, but says construction delays by the B.C. government have put the financial feasibility of the project at risk.

The war of words between the two provinces escalated Wednesday, as the B.C. government warned it would legally challenge Bill 12 — if passed — in Alberta courts.

StarMetro obtained a letter penned by B.C. Attorney-General David Eby on Wednesday to his Alberta counterpart, warning that the legislation is “beyond the powers of the Alberta Legislature” and would be a clear violation of Canada’s constitution.

“This attempt to restrict the flow of refined fuels, crude oil and natural gas across the Alberta-B. C. border is intended to punish the residents of B.C.,” reads the letter addressed to Alberta justice minister Kathleen Ganley and verified as authentic.

Citing B.C.’s own request last month for its Court of Appeal to rule on whether regulating the Kinder Morgan pipeline on environmental grounds is constitutionally allowed, Eby argued, “The Constitution of Canada prevents any province from attempting to resolve a legal dispute by inflicting economic harm through trade sanctions. Bill 12 is manifestly unconstitutional.”

Eby said unless Alberta asks a court to weigh in on the legislation’s legality, B.C. will launch its own lawsuit in an Alberta courtroom to do it for them.

Alberta Justice and Solicitor General could not be reached for comment by press time.

Federal NDP Leader Jagmeet Singh chimed in on the debate Wednesday by voicing his opposition to the project.

“It's clear this pipeline should not be built,” he wrote on Twitter, noting the federal government is giving Kinder Morgan a “blank cheque while dumping the risks on all Canadians.”

Notley said her government disagrees “quite fundamentally” with Singh, adding the province is committed to both protecting the environment and jobs.

Kinder Morgan has already scaled back construction and says it wants assurances by May 31 that the project, which would triple the line's capacity, is viable.

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